Considering a Fixer-Upper? 15 Ways to Avoid a Money Pit

During the housing boom (prior to the housing crash), few homebuyers wanted to bother with renovation projects. New homes and those in move-in condition were the ideal. That’s still true for many buyers. But others are finding that a well-done remodeling job can save them a lot of money.

Fixer-uppers are getting attention because:

Home prices are high in many cities, and a fixer-upper may be the only affordable choice in decent neighborhoods.

Home decorating and improvement TV shows inspire many buyers to use remodeling to get a home that’s perfectly suited to them.

Lovers of period homes always want to restore older structures.

However, the wrong remodeling project can become a money pit that strips your bank account right down to the studs. Here are 15 ways to identify the fixer-uppers worth your time and money:

1. Make cool calculations

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Bring an analytical eye when shopping for a home to renovate. Put your emotions in the back seat while you assess each home’s possibilities.

2. Love the floor plan

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Look for a floor plan you can live with. Moving load-bearing walls is an expensive proposition and generally to be avoided. SFGate tells how to identify load-bearing walls.

3. Start with the basement

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Inspect a home thoroughly, inside and out. Check inside and outside the basement or foundation for exposed wires and pipes, cracks in the foundation or water pooling around the home.

“The biggest problems in a house typically arise as a result of poor stability in the structure or foundation,” contractor Tyson Kunz tells Bankrate.

4. Inspect the roof

Runaway water can wreak havoc on any home, and a leaky roof is its quickest way in. If the home has an asphalt roof, look for cracked, curled and missing shingles. Gutters, downspouts and leader pipes should also be in place to collect rainwater and channel it away from the house.

5. Scrutinize bathrooms

6. Avoid ancient plumbing and wiring

The presence of these elderly building materials is a sign of trouble:

Galvanized steel pipes: Sediment can build up in the pipes, and they may leak and corrode.

Aluminum wiring: It’s a potential fire hazard.

Replacing a home’s plumbing and wiring are budget-killers involving thousands — if not tens of thousands — of dollars.

7. Back away from funky smells

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If your nose wrinkles when you enter a home, that’s a sign of problems. A home that emits bad smells may have a dangerous gas leak, sewer or septic problems, or mold — all of which require expensive remedies. Save your money for improvements you can enjoy.

Musty and dank smells come from mildew or mold. Mold is not always visible and may be inside walls. Don’t assume you won’t find mold in a dry, arid climate. It can be caused by condensation inside walls.

8. Watch for rot

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Rotting wood is another red flag. Use a pencil to push on trim and the wood around windows, and look for soft or crumbling wood.

9. Inspect drywall and floors

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Keep an eye out for flooring or drywall that is:

Stained

Uneven

Warped

Discolored

Peeling

These can indicate rot or mold.

10. Run from bad siding

Deteriorating siding raises a red flag for two reasons:

It’s expensive to replace. Depending on the material you choose, new siding can start at $10,000 to $13,000. Costs increase with the size and complexity of the job.

It may indicate other problems. Siding may be rotting, blistering or disintegrating because of rot or mold hiding behind the home’s exterior.

11. Beware leaky windows

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If you want to replace old windows with new, energy-efficient ones, that’s cool.

But be careful of committing to a home with leaking windows. Water seeping into a home through window leaks can cause untold — and unseen — problems from rot and mold. You can’t tell how bad the problems are without removing the windows.

12. Spot a bad location

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Become an expert on the neighborhood. Bargain homes are often in less desirable areas. Knock on doors on the street and chat with neighbors about crime. Your job is to assess how bad a neighborhood is and whether it’s really going to turn around.

Even if you don’t have children in school, your home’s next buyer might. So learn about the quality of local schools. Get neighborhood crime statistics from the police. Assess the home’s proximity to jobs, stores, banks, cafes, restaurants and playgrounds.

14. Hire a home inspector

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Once you’ve found a home that passes muster, hire a well-regarded home inspector to professionally look at the structure from top to bottom. This typically costs a few hundred dollars. Don’t buy a home without a professional inspection.

Tag along as the inspector tours the home if you can. You’ll learn a lot by seeing it through the inspector’s eyes.

Note: Don’t try to search for lead paint or asbestos. These are dangerous substances, so let the inspector do it.

15. Inspect after a rain

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See if you can schedule your home inspection right after it rains. Visiting at that time lets you and the inspector see if water accumulates around the foundation — a bad sign, as it can cause leaks and foundation problems.

Have you bought a fixer-upper? Tell us about it in the comments below or on our Facebook page.

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Marilyn Lewis

After a career in daily newspapers I moved to the world of online news in 2001. I specialize in writing about personal finance, real estate and retirement. I love how the Internet ... More

After a career in daily newspapers I moved to the world of online news in 2001. I specialize in writing about personal finance, real estate and retirement. I love how the Internet brings readers and writers together. Talk to me at [email protected]